One of my favorite strategies to identify good real estate investments is to just hit the road. It’s not easy, but I think it’s worth the trouble. New investors sometimes abandon up after only a few days if they are unsuccessful. In this respect, most people are wrong.
For investors who are willing to put in the time and effort to source many leads, driving for dollars is a viable strategy. You may have to wait up to six months to complete on your first deal, but if you can locate under-utilized properties, you’ll have a leg up on the competition.
But let’s define what “driving for bucks” actually is and isn’t. I’ll also share some suggestions that have helped me find good investment property prospects. Okay, so let’s start from the beginning.
- WHAT DOES IT MEAN TO “DRIVE FOR DOLLARS?”
- BUT HOW DOES “DRIVING FOR DOLLARS” WORK?
- WHAT TO LOOK FOR WHILE LOCATING PROSPECTIVE PROPERTIES
- IN ORDER TO MAKE MONEY, HOW OFTEN SHOULD I DRIVE?
- A GENERAL SCRIPT FOR MAKING MONEY WHILE “DRIVING FOR DOLLARS”
- DRIVING FOR DOLLARS TIPS
- CONCLUDING REMARKS
WHAT DOES IT MEAN TO “DRIVE FOR DOLLARS?”
Let’s start by clarifying exactly what it is that we’re discussing. Finding houses in need of repair while out “driving for money” is an art form.
Due to the property’s neglectful upkeep, it is hoped that the owner will be open to selling. If you’re willing to buy the house in its current condition, they might be interested in selling it to you (or close to it). They can avoid the hassle and expense of fixing up the place themselves and instead put the burden on your shoulders.
BUT HOW DOES “DRIVING FOR DOLLARS” WORK?
In what ways can one make money while driving?
For this reason, I am a strong supporter of “driving for dollars,” which allows investors of all means to get in on the action.
Real estate professionals may often spend thousands of dollars each month to get lists of houses that fit certain demographic criteria. They can use these lists to find homes that have the following characteristics:
- A non-resident owns the property (or even out of the country).
- It is not the owner’s primary residence, either because it is rented out or because nobody is living there. Zoning infraction notices have been issued for the structure or land. The divorce papers suggest that this home may be put up for sale soon.
- And many, many others!
Or a myriad of other criteria; you’d be astonished how specific one can be with such lists if one has the resources to do so.
But does it imply you can’t start investing if you don’t have thousands of dollars to throw at these lists every month? Hell no! Here’s when driving for cash comes in handy; it levels the playing field by placing eyes on the pavement.
Property sourcing on your own terms eliminates the need to go via the gatekeepers who maintain such lists, giving you a significant advantage over the competition. In the driving for dollars strategy, if I find a property that has a few issues, doesn’t seem good, and isn’t on the list that investors are going for, I may be the only one pursuing it. There is a better possibility I can negotiate a better bargain because I won’t have to engage in a bidding war with investors who have huge funds.
WHAT TO LOOK FOR WHILE LOCATING PROSPECTIVE PROPERTIES
What do you think? Am I starting to make sense? Great! Let’s speak about what you should look for when you head out to explore properties, because that could signify a new lead for you.
To achieve this, you must seek out residences that are in need of cosmetic restoration. Homes can also be in structural deterioration, but for the sake of simplicity, let’s simply focus on the exteriors for now.
You should be wary of houses with peeling exterior paint, garages that are in disrepair, overgrown lawns that have not been mowed in a long time, outdated decorative elements, broken-down cars parked in the driveway, and any other signs of neglect in the yard.
IN ORDER TO MAKE MONEY, HOW OFTEN SHOULD I DRIVE?
The more miles you put on your car, the more likely you are to stumble onto a great investment property. But I won’t sugarcoat it; at the beginning, it could take longer than you expect.
It will likely take you over a thousand houses to find the perfect one. The greater your pool of available properties, the higher the probability that you will locate a willing seller.
On average, I’d say it takes three months to find a deal and close it, however that time will naturally decrease as you get better at making cold calls to potential sellers and presenting your offers.
Generally speaking, I spend 15 hours every week looking for new business opportunities. Spend 2 hours a day on lead generation during the week, then use the remaining 5-10 hours to follow up with those leads on the weekend. You should be able to inspect about 30 homes each hour at minimum efficiency.
The more practice you get, the simpler it will get. If you’re serious about making money, driving for others is a viable option.
A GENERAL SCRIPT FOR MAKING MONEY WHILE “DRIVING FOR DOLLARS”
So, once you’ve located a suitable property, how do you initiate contact? Several possibilities exist; nonetheless, feel free to use my script (though you may be surprised at how simple it sounds).
“Hello, I’m looking for 123 Main Street’s owner. Are you there?
Is the answer yes:
I’m in the real estate business. I was wondering whether you were considering selling any of your property in the region. “Are you thinking about putting your house up for sale?”
Most individuals here will simply answer “no” to be honest. If they do, you shouldn’t be concerned. It’s a numbers game; the more pitches you make, the more likely you are to get a “Yes!”
If they decline, then
Saying, “Oh, I’m really sorry about that. Hello, my name is Ryan, and I am a real estate investor wanting to make a purchase in your neighborhood. When asked, “Do you want to sell a piece of property or know someone who does?”
DRIVING FOR DOLLARS TIPS
Here are a few pointers to help you maximize your earnings while pursuing a career as a driver.
Motivated by a desire to help small investors uncover properties that might otherwise go unnoticed, “drive for dollars” volunteers spend their time exploring neighborhoods in search of potential investments. Here are a couple of pointers to help smooth things down.
Investigate which areas code have the most volume of cash transactions. This will help guarantee that the sellers do not have any mortgages or are in the process of foreclosure, and that they are in a position to sell.
Try to choose postal codes that fall somewhere in the middle of the pricing range. You should look for postcodes that are neither extremely expensive nor extremely inexpensive for housing. You won’t have to worry about wasting time looking at second houses or properties that demand more money to fix up than you have right now.
Explore the neighborhood at the wheel. See what’s in the neighborhood and how the locals live to get an opinion. Get some fresh air and strike up a conversation with any passing neighbors. It’s amazing how much you can learn about a person simply by talking to them.
Do a six-monthly loop around the same streets. Don’t lose up on a neighborhood just because you’re having little luck finding a suitable property there; new opportunities arise regularly. Please return in three to six months. If you’d like to keep track of where you’ve been, our app can do that, too.
After finding a possible home, you can use skip tracing to identify the owner’s contact information. Find the owner’s email address, home phone number, and mobile phone number with the help of a skip trace.
If you’re in a position to do so, send some postcards. Despite the indirect nature, this can be useful for sourcing additional attributes. Don’t stress if you can’t afford it right now. Don’t worry about anything but using skip traces to make contact.
CONCLUDING THOUGHTS
Making real estate investment accessible to people of all income levels, driving for dollars does just that. Finding these hidden treasures before they hit the MLS is time-consuming and can add miles to your car’s odometer, but it can be the difference between scoring a terrific deal and getting trapped in a bidding war. Try out a few of these suggestions, and share your successes and failures with the rest of us in the comments section.
